Bitcoin is a gateway, hopefully a route from the nightmarish world of fiat currencies to worlds upon worlds of virtual goods, services, commodities, currencies, experiences, activities and so on.

Once the initial leap to bitcoin has been accomplished, however many awful hoops people have to jump through to accomplish that, hopefully a lot of those hoops and nightmares can be left behind in the 'old world' as we move forward into worlds of warpcraft and weftcraft, free to enjoy our magic swords and starships and galactic empires, even incorporating this little planet Earth into our larger universes and GNUniverses.

(Who knows, maybe we virtual entities living in virtual worlds *do* have some "essential self" in some world somewhere; is that somewhere to be a "hell on earth" or an open universe of open minds and hearts and... mining opportunities?

The idea is that Bitcoin as a currency is just a medium barter good that is commonly used to barter. The value of the medium is based on the number of people who agree to use it and other infrastructure such as the estimates worth of the economy.

And about the idea that people won't spend Bitcoins because if other people spend it, its value increases: it's just a social contract that people inherently make with any system. Otherwise no one would sell Bitcoins on exchanges and people would just hoard US dollars and never spend them. The issue is if no one spent anything then the value would never increase, in the worst case scenario someone breaks. And if anything if you start using the medium of exchange to start a business that makes money, it generates increase in value buy spending medium.

For something to have value it either has to be rare (gold) or almost universal (US Dollar). Gold was used to as money once because it is accepted as the "best" method for exchange, then the supply couldn't meet the amount to allow it to be more widespread method of exchange. Bitcoin on the other hand can be divided, although maybe at .0000000000000000000001 Bitcoins per square mile of land will not be the best currency because it would be just as hard to use as a single gold atom. Either it gets replaced by another currency as paper money replaced gold or Bitcoin increases the number of coins sooner or later. But that is just how goods work.

The thing to get out of this:Whether or not Bitcoin becomes more of a transaction currency is based on whether or not the population using Bitcoin grows. And starting businesses that accept Bitcoin makes Bitcoin more accessible to people thereby increasing the number of people that are willing to consider using it.

I understand how bartering works, and bitcoin's intention and necessity to be barter fodder, and I also understand what it will take bitcoins to become a transaction currency. What I don't understand is whether satoshi realized he was overcompensating the bitcoin or not. It's not a revolution of the currency system, but moving complexity to another part of the system. The revolution is in the p2p / electronic transactions. Why go through all this trouble and not design it so trading was inevitable? To me, that's a fundamental flaw. Would the best currency not be immediately apparent even to average Joe? Would it not automatically assume control of all businesses because it just does what its supposed to? Bitcoins are slowed down by the nature of their existence; prospecting.

Most people don't hoard US dollars because the money supply inflation rewards "double debt now pay back later"...they hoard ownership and deeds instead. That's why I said that people will spend everything else, before bitcoins, then obviously use bitcoins and other precious things like gold when they have nothing else but need to pay for something. This is all assuming negative cashflow, of course, as that's the only reason to ever really dip into savings.

Gold has a value over bitcoins simply because there is intrinsic value: "If I can't find a buyer for this in the future, I'll just let my wife wear it, or use it in electronics etc." But the governments have decided to hoard it, and it's a pain in the ass to melt down and split all the time. Bitcoins are easy in that way, but do not have intrinsic value, so thus must get 100% of their value from being that trade token. How much would you pay for the the ability to not have to buy a whole pig? In the fiat system, you pay the banks an interest rate for the creation of their IOU barter notes, and that is the premium. With bitcoins, the premium is the mining and network hashing involved, but current prices are ruined by speculators of the "bitcoins are valuable in 20 years" school - enough to destroy their use as a trade token (the premium is too high).

Satoshi has achieved ability to trade and difficulty in forgery. However, by making it like gold, but not gold, there is no "fall back" if it no one will trade it. Fiat currency *has* to be guarenteed by the government issuing it, essentially saying they'll tax the crap out of everyone to make sure it holds its value, and they do. Gold is guarenteed by the fact that it is a great heavy inert metal and looks good. Bitcoins are backed by nothing, and that's the experiment; to see if people will accept it just because it is, and they will not if the premium to use it is too high (hence this thread, but add cost of speculation). Businesses don't care how they get paid. People care about how they pay. I don't see other currencies vanishing anything time soon, and thus, bitcoins only value is in value storage due to scarcity.

What I don't understand, then, is why Satoshi decided to allow the creation of bitcoins via competitive mining (which has its own merits if you want to create a store of value), when its to be used as a currency (which is simply an IOU). Gold is not an IOU...gold is...jewelery and happy wives. Fiat currency used to be a paper version of gold, since they could be exchanged, and since that stopped...it has been narrowing down to essentially it's real worth; nothing but the paper its printed on. Why not simply design bitcoins to be a record of a transaction in a community? In a way it supposedly is, but there's a subtle difference.

If the idea is to use bitcoins as "a valuable thing" to trade for a "valuable thing", as opposed to an IOU for "a valuable thing", then there's nothing wrong with what's going on now. The market will take its course, in 100 years all the coins will have been mined and its established that they're safe, and at some point close to that time bitcoins would have built a working trade economy around the bitcoins. However, because bitcoins are NOT a commodity that can be consumed (essentially a fiat currency), they are not an inherently valuable thing, and so must be used as an IOU, which is again unlikely when they're so expensive.

but because there is no inconvenience storing them (other than wallet security), their value is too high to trade. "I will get rid of my other stuff before I get rid of this"

You cannot understand bitcoins isolated from its context. This is a typical mistake I see over and over in this forum. Most people are so corrupted by the fiat monopolic currency mentality, that they cannot see beyond that reality.

Bitcoin will not grow in value for ever, that is impossible in a free market. If the bitcoin concept prooves to be succesful, many other similar crypto currencies will come along. As long as there is enough incentive to mine, there is no problem for other currencies to come along. Of course right now nobody knows if bitcoin will last, so no serious contender has come along yet. But expect more currencies (wich means more crypto currency supply) will come along in a not very distant future. As there is more competition and supply, bitcoin price will eventualy drop or become stable.

Bitcoin is an experiment in free markets; bitcoin and its philosophy are inseparable. You cannot understand one, without the other. If you see bitcoin through the lens of a monoplistic currency (that has to dominate the whole economy), you will invariable come to false conclusions. Instead, if you see bitcoin in the context of free market in currencies, you will start think more clearly.

Aye it will absolutely grow in value forever assuming increased human population, use as a trade tool and inability to forge. Did the discovery of silver stop the price of gold going up?

Bitcoin is a gateway, hopefully a route from the nightmarish world of fiat currencies to worlds upon worlds of virtual goods, services, commodities, currencies, experiences, activities and so on.

I agree it is a gateway, but its interesting that you use the word hope.

I haven't really thought about this much yet, but is it that difficult to create a currency that doesn't require hope? I mean...the bitcoin design pretty much guaranteed their creation by making them scarcity based, and mining/hashing worthwhile. It relied on human greed to make it happen, and that's a certainty. Is there no certainty in humans (greed based or otherwise) that can ensure fair trade?

Also, what is fair trade? apart from something that looks like a planned EVIL COMMUNIST OMG economy?

Seriously, it's only going to take an easy to use smartphone app to go viral to send bitcoin skywards. As long as it checks the market, uses a barcode scanner, has a secure wallet, and is fast, we will have a useful ninja currency.

If we can get a couple of basics done like this, and people can get bitcoins then go out and buy lunch in Meze Grill as easily as they can with a credit card, we'll be getting closer.

We need to be able to buy them easily, store them securely, exchange them with smartphones. The Steve Jobs touch. Nothing special. Steve Job didn't invent the mp3 player, he opened up the public's imagination to see the mp3 player in its correct light.

Yes we need all of the other applications and infrastructure and cool sites, but we haven't got close to getting the basics right yet. If we do, the magic of Bitcoin will shine of itself.

We need to be able to buy them easily, store them securely, exchange them with smartphones.

You got the jist of it in this one sentence !After a bunch of deep economic / sociological philosophy posts and a couple of libertarian / utopian / hippi posts in this thread, here's one that's simple and makes perefect sense.

The hope part relates to politics, law, and thus maybe under that, political philosophy.

It is a hope that the amount of murder and war involved in allowing the technical potential of the technology will not be too huge, or that the technical difficulty in suppressing it will be high enough to make slaughter war or even mere heavy populating of prisons seem to enough people to be wasteful that maybe it won't get that bad.

There might be technical solutions to the crazies holding nuclear weapons, but do any of them allow letting them die of old age rather than by some possibly more expedient means?

"The Important Things to Take Away"What we need right now is developers to make some very very user friendly sites, i.e. something in the likeness of Ebay in combination with escrow service that provides both buyer and seller protection (since Bitcoin makes punishing scammers considerably harder). Once people have a concrete and reasonably safe place to sell and exchange individual goods, we will see more large legitimate businesses spring up, where escrows will not be necessary for them and quality control and reputation will prevent the majority of scamming.

I'd like too but I neither have the money nor the programming experience or connections to pursue such an endeavor. Although I would greatly enjoy providing a developer with ideas.

People pay for convenience and safety! Right now Bitcoin is heading towards being a transaction based currency with no reasonable means of transacting.

AGREED!

I'm thinking this should be easy to do, for example:

1- Trade companies:

Oh! I'm a trade company, I want to start buying and selling Bitcoins, what to do?

I am just saying, a LOT of people who have BTC right now are the type of people who want to store wealth. These people didn't get wealth by buying overpriced goods from inept merchants that may or may not be trusted by the community.

So don't be surprised if you start BitAccordions.com and have to shut down because of lack of demand.

In re BitAccordions.com: When the demand does tip, BitAccordions.com would be a nice niche market. Think iPad, iPhone, iThis, iThat... Now juxtapose that to BitAccordions (or btcAccordions/bcAccordions), BitSocks, BitShoes, btcSuits, btcWear, bcBooks, BitAPPS... When people see the "i" in iPhone, they think Apple. When they see "Bit" (or btc or bc) in front of a product or service, they'll know immediately that that company accepts Bitcoin.

If you agree, should we use Bit or btc/BTC or bc/BC in front of our niche keyword? I can easily envision 10's of thousand micro niche sites that only accept BTC for the product or service it'll provide. On those sites, one can easily link to another site where the proprietor has an array of other products/services that accepts $ and BTC.

BUT, for transaction economy:* Will the transaction fees stay low enough to continue using this commodity as a sub-dollar Hawala medium ?

If yes then huge miners will cash-out leaving the system vulnerable to attacks can be made by them or any hacker network that can offer to utilize couple mining pools that we have right now.

If NO then the system will be less-business attractive with: no advantage in lower transaction fees, questionable anonymity, less security backed up by smaller mining community, delayed transactions, volatile sub-hour pricing .. etc.

* Will the mining community continue to be this large providing this amazing network safety ?

I am a BTC man ... and these questions to know more or to pin point near less-than-a-year issues.

Two things I thought wouldn't be a problem since I started with BTC are:

A technically savvy person at work basically comes to me asking to buy BTC in cash. He has been waiting near a week going through the whole transfer/deposit process. This guy actually wants to start messing with this software that works as a mobile (iphone/android) betting application for friendly bets between friends with micropayments in BTC. His original idea didn't work with USD for obvious reasons.

We then literally discussed the idea of a mobile cash-->BTC truck that would just tweet it's location around the city. Yes it is *THAT* difficult to get BTC currently where a solution like this actually seemed practical right now.

Most people just don't want to mail cash or go through the hassle of deposits. Paypal got over this adoption hurdle by providing an application that gave people money to an email address. Most people were willing to do the steps required to get money they already *HAD* from someone. Look at miners - they spend tons of time/money just to get the promise of future $$$.

----

Second, I convinced some friends of mine to accept BTC as payment. It essentially came down to the money argument again. They are a small t-shirt company and spend close to $15k a year in "transaction fees" between paypal/authorize.net. After explaining BTC (no chargebacks, little/no transaction fees, etc) they were sold to try the experiment. http://babbletees.com/blogs/news/3494702-babbletees-now-accepting-bitcoins. Within the first 24 hours they had two transactions, someone tweeted to Shopify (Babbletees E-Commerce provider) that they should start integrating BTC as a payment method for their customers, and in response Babbletees opened a ticket with Shopify for same. You can imagine the buzz around their office.

If this story could be repeated with even a small percentage of the online stores in existence - this crap about drugs, money laundering, terrorism, speculation, market crashes, etc.. would all go away.

In closing, these two problems *MUST* be solved (getting BTC to users, and getting rapid adoption by merchants). If approached properly, this will insure the success of BTC in the future.

Miners control the majority of Bitcoins and the large majority of people involved in the Bitcoin community are strictly Miners looking to exchange Bitcoins into $

Barely anyone in the community listens to themselves.

If the majority of BTC holders/owners are looking to exit BTC for real currency, then obviously there will be a finite number of "trading places" cycles of BTC seller looking to exit the BTC holding status vs new market participating looking to enter the BTC holding status.

Unless the BTC "economy" were to offer a service(better: more than one) that DOES NOT EXIST PURCHASEABLE IN ANY OTHER SHAPE OR FORM OUTSIDE OF BTC, there is no reason for someone to have or hold BTC if they can come to attain the service either more safely, quickly, commonplace, securely, etc pp by means of normal currency(exception: other significant advantages in some shape or form that also get recognized by enough "outsiders" to gain traction and make the adoption of something new instead of something established more viable/attractive).

The exchange to BTC itself already carries significant risk (like buying tokens for an arcade - the funny money only works in wonderland, and if you leave it before spending it all, it's worthless weight in your pocket), and is only mitigateable if the risk of a sudden disappearance of BTC markets or value is low or nonexistant. Currently still, you can at least cash out again, even if there are value swings.

All of these basics lead to the shaky foundation that BTC currently stands on. Until you find a whole bunch of creative/innovative/unique people that will only offer their goods and services for BTC, you really have no compelling argument why BTC should work / be used.

And if really what you are inferring were/is true, and the only main/major purpose is speculation and then cashing out, then at some point the jig is up and the constant outstream of BTC for capital will so heavily outweigh the market structures, that prices will go bust and the buyers will vanish to negligible to nonexistant amounts, as they have nowhere left to go / no more reason to join the game.

This is also why people calll it one big ponzi scheme; if that assumption is correct, then you need to constantly exploit either the BTC using morons that keep buying more BTC in hopes of them ever growing more valuable(mostly through the moron next to them ALSO buying them for the same reason..look guys - who is going to cash both of you out if you are the only two guys left with all BTC in the end? Now just extend this thought to the speculator pool in total..), i.e. you keep praying the guys who have thought it a great investment keep working in the real world for real money to donate to those cashing out of BTC, or, option B, you need an influx of people suckered into the concept via media hype.

However in neither version is there an endgame that does not end with those that have exited before the music stopped being the lucky ones, and a select few with literally most if not all of the BTC left in their hands without much of a counter-value or cashout option.

I don't really see how this is solveable, and I've already heard all the "Yea, but there's people already accpeting BTC for xyz.." and "If only 10% of the world adopted BTC" delusions..

From the OPs own post he basically lays out a premise that leaves no other option than deck of cards => mess.

Of course if someone DOES find some kind of magic bullet killer app/use/whatever that all of this may or not be good for, maybe you can build something sustainable. Others have found ways, too(second life, MMORPGs, other pseudo-"ecosystems" in form of entertainment and services), so it's not completely impossible. It's just a big empty slate and giant question mark as of now.

I still maintain that unless someone comes up with something along the way, there is a very real and constantly growing risk of the cycle running out of "feeding cash".

(Who knows, maybe we virtual entities living in virtual worlds *do* have some "essential self" in some world somewhere; is that somewhere to be a "hell on earth" or an open universe of open minds and hearts and... mining opportunities?

-MarkM-

+1 Yes, the free market of cyberspace allows one to exist where he cannot in meatspace. In cyberspace we can have multiple identities that allow us more freedom of expression without the common prejudices of meatspace. bitcoin helps further this freedom of expression.

but because there is no inconvenience storing them (other than wallet security), their value is too high to trade. "I will get rid of my other stuff before I get rid of this"

You cannot understand bitcoins isolated from its context. This is a typical mistake I see over and over in this forum. Most people are so corrupted by the fiat monopolic currency mentality, that they cannot see beyond that reality.

Bitcoin will not grow in value for ever, that is impossible in a free market. If the bitcoin concept prooves to be succesful, many other similar crypto currencies will come along. As long as there is enough incentive to mine, there is no problem for other currencies to come along. Of course right now nobody knows if bitcoin will last, so no serious contender has come along yet. But expect more currencies (wich means more crypto currency supply) will come along in a not very distant future. As there is more competition and supply, bitcoin price will eventualy drop or become stable.

Bitcoin is an experiment in free markets; bitcoin and its philosophy are inseparable. You cannot understand one, without the other. If you see bitcoin through the lens of a monoplistic currency (that has to dominate the whole economy), you will invariable come to false conclusions. Instead, if you see bitcoin in the context of free market in currencies, you will start think more clearly.

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This is one of the finest posts I've read on this forum. I'm not joking. The confused view of Bitcoins as something of intrinsic value (deflationary and capped in amount) versus its infinite divisibility (representing a view of Bitcoins as currency) are directly in competition with each other. This is why people circlejerk each other with the idea that soon "all businesses will accept Bitcoin" while they sit there hoarding bitcoins in hopes of some future cash-out because of its deflationary worth (implicitly admitting to the fact that it will come from downstream late adopters who buy into the pyramid). It can't be both, folks. Either its a proxy for value, or of intrinsic value. Perhaps someone will create a currency to serve as the trading proxy for ever-so-precious bitcoins, and add another layer to the mix?

I understand how bartering works, and bitcoin's intention and necessity to be barter fodder, and I also understand what it will take bitcoins to become a transaction currency. What I don't understand is whether satoshi realized he was overcompensating the bitcoin or not. It's not a revolution of the currency system, but moving complexity to another part of the system. The revolution is in the p2p / electronic transactions. Why go through all this trouble and not design it so trading was inevitable? To me, that's a fundamental flaw. Would the best currency not be immediately apparent even to average Joe? Would it not automatically assume control of all businesses because it just does what its supposed to? Bitcoins are slowed down by the nature of their existence; prospecting.

Most people don't hoard US dollars because the money supply inflation rewards "double debt now pay back later"...they hoard ownership and deeds instead. That's why I said that people will spend everything else, before bitcoins, then obviously use bitcoins and other precious things like gold when they have nothing else but need to pay for something. This is all assuming negative cashflow, of course, as that's the only reason to ever really dip into savings.

Gold has a value over bitcoins simply because there is intrinsic value: "If I can't find a buyer for this in the future, I'll just let my wife wear it, or use it in electronics etc." But the governments have decided to hoard it, and it's a pain in the ass to melt down and split all the time. Bitcoins are easy in that way, but do not have intrinsic value, so thus must get 100% of their value from being that trade token. How much would you pay for the the ability to not have to buy a whole pig? In the fiat system, you pay the banks an interest rate for the creation of their IOU barter notes, and that is the premium. With bitcoins, the premium is the mining and network hashing involved, but current prices are ruined by speculators of the "bitcoins are valuable in 20 years" school - enough to destroy their use as a trade token (the premium is too high).

Satoshi has achieved ability to trade and difficulty in forgery. However, by making it like gold, but not gold, there is no "fall back" if it no one will trade it. Fiat currency *has* to be guarenteed by the government issuing it, essentially saying they'll tax the crap out of everyone to make sure it holds its value, and they do. Gold is guarenteed by the fact that it is a great heavy inert metal and looks good. Bitcoins are backed by nothing, and that's the experiment; to see if people will accept it just because it is, and they will not if the premium to use it is too high (hence this thread, but add cost of speculation). Businesses don't care how they get paid. People care about how they pay. I don't see other currencies vanishing anything time soon, and thus, bitcoins only value is in value storage due to scarcity.

What I don't understand, then, is why Satoshi decided to allow the creation of bitcoins via competitive mining (which has its own merits if you want to create a store of value), when its to be used as a currency (which is simply an IOU). Gold is not an IOU...gold is...jewelery and happy wives. Fiat currency used to be a paper version of gold, since they could be exchanged, and since that stopped...it has been narrowing down to essentially it's real worth; nothing but the paper its printed on. Why not simply design bitcoins to be a record of a transaction in a community? In a way it supposedly is, but there's a subtle difference.

If the idea is to use bitcoins as "a valuable thing" to trade for a "valuable thing", as opposed to an IOU for "a valuable thing", then there's nothing wrong with what's going on now. The market will take its course, in 100 years all the coins will have been mined and its established that they're safe, and at some point close to that time bitcoins would have built a working trade economy around the bitcoins. However, because bitcoins are NOT a commodity that can be consumed (essentially a fiat currency), they are not an inherently valuable thing, and so must be used as an IOU, which is again unlikely when they're so expensive.

The confused view of Bitcoins as something of intrinsic value (deflationary and capped in amount) versus its infinite divisibility (representing a view of Bitcoins as currency) are directly in competition with each other.

You lost me there. Why should those be in competition? They appear complementary to me. Infinite divisibility is what allows a deflating medium to still be able to serve as the Numéraire for small amounts of value.

I partly sympathize with the OP's point. But I think there's an alternative hypothesis.

Precious metals are not (normally) used in transactions yet retain use as a store of value. They support a rather large network of bullion and coin dealers, who exist by collecting a transaction fee when it is bought and sold. Reputable bullion dealers serve to give confidence against counterfeit coins and the like. Their function is similar to the function of miners in Bitcoin (conferring trust in the blockchain), who can likewise survive on transaction fees, post block-bounty. Even if Bitcoin's use as a transaction medium remains small, why can't Bitcoin serve the same store of value purpose? The miners collecting transaction fees would serve the same role as the dealers in the bullion realm. Bitcoin could survive as a capital asset. The market has already demonstrated a willingness to ascribe value to its money-like characteristics.

I'm not arguing in any way against the desirability of Bitcoin-denominated trade of goods and services. I hope it flourishes. I'm merely arguing that there is a rationale for the survival of Bitcoin without commensurate growth in such trade.

We need to be able to buy them easily, store them securely, exchange them with smartphones.

You got the gist of it in this one sentence !After a bunch of deep economic / sociological philosophy posts and a couple of libertarian / utopian / hippie posts in this thread, here's one that's simple and makes perfect sense.

That doesn't require a new currency. Just easier and lower-cost methods of transferring an existing one. Like DoCoMo, Vodafone, Dwolla, Square, Google, etc. are doing.

The confused view of Bitcoins as something of intrinsic value (deflationary and capped in amount) versus its infinite divisibility (representing a view of Bitcoins as currency) are directly in competition with each other.

You lost me there. Why should those be in competition? They appear complementary to me. Infinite divisibility is what allows a deflating medium to still be able to serve as the Numéraire for small amounts of value.

I'd love to respond to your hypothesis, but I don't quite understand what you meant by it. As for the quoted bit:-

I agree that's the idea behind bitcoins; infinite divisibility is supposed to help a valuable item to be used as a currency. The problem with trade, is that sometimes you don't have something of value to give, and you need a way to take something of value now and pay it back later (a way to record debt). Fiat Money is the IOU, which you can use in place of the item of value as a promise of future payment, whereas a valuable bitcoin is something of actual value.

If you infinitely divide something of value, and use that to trade, you're not actually solving the problem: sometimes you don't have something (eg a bitcoin) to trade. How can something be an IOU of itself? As Shinobi mentioned, you need something that references bitcoins to be an IOU, like "the bearer of this note is owed 40 bitcoins worth of stuff". Why should anyone accept that note? well, that's why the government makes it legal tender, and backs it by bitcoins etc etc.

I realize that probably sounds messy, so let me try to say it another way:

A trade can be completed in two ways:1. trade a valuable thing for a valuable thing, like say half a pig for a chair.2. trade a valuable thing for a future valuable thing, like say half a pig for a note which says "I owe you half a pig (or a chair I'm building) later".

Bitcoins are the first type of trade. Money is the second type of trade.

Breaking bitcoins up into a billion little pieces will never allow it to be used as an IOU, if people think it has intrinsic value (I don't believe it does, but that doesn't matter if everyone else does), because an IOU is "I owe you something valuable" and you're actually giving something valuable, which doesn't make sense. Fiat currency allows the promise transaction to take place - it allows people to take goods now and "pay" them back later. This is a very important thing, as it simply allows debt. If bitcoins were used to record debt, like money does, then they would have little speculation value and low cost, like money.

In an advanced, complex economy a farmer might sow a whole chunk of land. The crop might take a year to grow before harvest, but needs fertilizers, a tractor and food etc before he can harvest. How does the farmer buy fertilizer and tractor to make the stuff he needs to pay off the fertilizer and tractor, if he doesn't have the crop to pay for it with? He must use a promise to pay, or money, to create the debt transaction, which he can clear when he has harvested his crop. It's possible to do this without using money (by just using stored wealth like gold or bitcoins), but its just very very slow. Money speeds up the process by creating efficiency from the future to use now, at the risk of not being paid back (bankruptcy, which should generally follow the premium interest rate).

Again, it's absolutely possible to have an economy run by units of value like bitcoins or gold, except it will just take a very long time to develop, since bitcoins have to overcome a whole heap of other psychological issues, as well as reach an acceptable cost of security.